LOCAL CHAPTERS

Find chapters in your area

How Small Companies Can Compete with Big Ones for Top Talent

Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.

Page Content

If the quality of the applicants you’re attracting isn’t stronger than that of the people already in your company, the best you can do is hire people who are like the ones you’ve always hired. Here are some ideas on how to improve the quality of candidates you’re attracting and hiring.

The Right Hiring Strategy to Hire the Right People

The key to competing for top talent has little to do with process and more to do with strategy. Small companies have significant advantages over their bigger rivals for the same talent: They’re more nimble. The people they hire can have a bigger impact on company success. They can make decisions more quickly. And they can more easily modify their jobs to better meet the needs of the people they’re hiring.

Yet most small companies throw away these advantages by trying to hire people the same way the major companies do. This is a losing strategy.

Rather than trying to find as many active candidates as possible and weeding out the weaker ones, try to attract fewer but better candidates. Focus on improving quality of hire rather than reducing costs and improving process efficiency, because the impact of every great person hired at a small company is enormous when compared to the impact of hiring the same person at a bigger company.

For example, one of my major clients in the 1990s was a small, unglamorous company in the food processing industry. The CEO epitomized how to attract and hire outstanding talent. He met every top person I recommended on an exploratory basis to describe his vision of where the company was going. He hired an outstanding team that grew the company from $20 million to $250 million in 12 years when it was sold to a major Fortune 200 company. Strategy does trump process, but you have to have the right strategy.

Define the Job, Not the Person Doing the Job

No top-caliber person, whether active or passive, is looking for an ill-defined lateral transfer. This is what the big companies do: prepare laundry lists of “must-have” requirements and hope for the best. Rather than defining a job by describing the traditional skills and experiences needed, it’s better to identify the top performance objectives required to be successful.

At one small California company making welding equipment and machine tools, I asked the CEO what a marketing leader would need to do to be considered successful. The answer turned out to be “create a technically intense product road map to push the business to larger international firms.” As a result of this exercise, it was clear to him and his whole management team that skills don’t determine success; it’s what people do with their skills that matter far more. The person hired, who would have been overlooked on the traditional hiring basis, had a different mix of skills and experiences but turned out to be a top performer.

The Best Candidates Don’t Look for Jobs the Same Way Average Candidates Do

Your recruitment advertising messages—whether a job posting, your careers site or your e-mails—need to differentiate your company, your people, your culture and the jobs you’re offering. You won’t be able to compete with the big companies in terms of reach, but you can compete with them in terms of content. Have an attention-getting title or subject line; emphasize what the person will learn, do and could become in the body of the message; and turn off the “apply now” button. Instead, give people an opportunity to chat about your opening prior to applying. Be available for conversations. Focus on attracting fewer but stronger people.

At one small market research company in the U.K., the CEO advertised his HR and administrative position as the “Wizard Needed to Hold Things Together with Duct Tape and Chewing Gum.” One person responded in a few hours with an e-mail saying he would come over right away on his broom for an interview. It was signed “Harry Potter.” He was hired.

Conduct Intelligent, In-Depth Interviews

The most important aspect of interviewing is asking candidates to describe a comparable prior accomplishment for each of the performance objectives required for job success. Then have each applicant share his or her evidence on the factors that best predict on-the-job success. The big ones include ability to do the work, motivation to do the work, and fit with the hiring manager and company culture.

Recruiting and Negotiating the Offer

Before I make a formal offer, I ask candidates if they really want the job, regardless of the compensation package. Most say yes. I then have them tell me why. I expect to hear them clearly describe the work that needs to be done as both internally motivating and the basis for a career move. In addition, I expect them to clearly describe why the hiring manager’s style is a good fit in terms of how they need and want to be managed and developed. On top of this, I want them to describe how the company culture maps to where they’ve done their best work. If I don’t hear this, I don’t make the offer. You shouldn’t either. If the candidate doesn’t give this response, it means the interview and assessment process weren’t as thorough as necessary. When candidates take jobs that are poorly defined, where the hiring manager’s style hasn’t been fully explored and where the cultural fit is problematic, long-term success and satisfaction is unlikely.

It’s easy for small companies to “outcompete” larger companies for the best talent. But they can’t do it by benchmarking how the best big companies hire people. They must do it by being different. Different in the way they define their open jobs. Different in the way they find candidates. Different in the way they conduct the interview and assessment. And different in how they make offers. Collectively, this difference is about offering everyone hired a true career opportunity that offers more stretch, more growth and more job satisfaction than anyone else. Big companies can’t do this. Small companies must.

Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.